Friends from the investment sector, greetings. Welcome to IGG Inc's 2023 interim results announcement investors' conference call. Today, our presentation and Q&A session will be conducted in Mandarin. The presentation PPT has been uploaded to igg.com investor relations section. Before we begin, let me introduce the management on the line. Executive Director and COO, Mr. Xu Yuan. Investors, greetings. Executive Director, CFO, and joint company secretary, Ms. Shen Jie Lei. Investors, greetings. In today's meeting, there are two parts. The management will first present the group's business and financial performance. After that, we will have a Q&A session. Now let's invite Mr. Xu to present the group's 2023 interim results. Okay. Shareholders, friends, greetings. Thank you for joining IGG 2023 first half results announcement. First of all, I would like to thank you for your long-term support for IGG. 2023 was affected by the interest hike in the U.S., global inflation, and Russia-Ukraine war. Global economy is coming down. Many industries entered recession. In the first half, IGG did quite well. Our revenue reached HKD 2.499 billion, up 19% half on half. For profits, we lost HKD 360 million. This half year is the most critical half year for IGG. We ride on the past and create a new future. It is a critical stage. We seized the main trends and directions and injected more certainty, stability, and development positive energy into the company. In this half year, the IGG group's overall revenue went up significantly. At present, our monthly gross billing is already stable at above HKD 500 million. We almost returned to our peak level. At the same time, we said goodbye to loss. Starting from June, we began to be profitable. In June, net profit was almost HKD 50 million. In July, we continued to grow. August is not over yet, I can say for sure that we will continue to be profitable, and this is only a start. This year, what is exciting is that for our high-growth new projects, apart from Viking Rise and Doomsday, there is the third APP platform business. For these three new projects, the incremental gross billing in July exceeded HKD 200 million, and all three projects started to be profitable. For Doomsday, in July, it exceeded the $10 million monthly gross billing milestone. In July, for this game, Doomsday, gross billing reached HKD 82 million. In a single month, it grew 20%. Besides, it achieved profit of HKD 10 million. In the past three months, we did large-scale adjustment to the game so that the game ARPU improved significantly. It did not only surpass Viking Rise but also Lords Mobile. With very little advertising expenses, the number of DAU did not change. The monthly gross billing grew from HKD 60 million to HKD 82 million. I would like to stress again that its growth did not rely on advertising. It relies on the charisma of the game itself. For Doomsday, it showed excellent growth. I would like to tell you that this is only just a start. More content and gameplay updating of the game will happen next week and next month, two times. For this gameplay and content updating in the SLG category is revolutionary and unprecedented. We will connect all servers so that gamers can move around freely. We will create a wholly open world for gamers. In September, we will use this as a foundation to offer to gamers a brand-new gameplay on the SLG platform, that is PUBG. Similar with Game for Peace, PUBG killing gameplay. After these two updates, we will start a new round of promotion, which will push the gross billing of this game to a new high. Another excitement is our APP platform business. In 2013, we started the business. Through developing different APP, we hope to create our own traffic platform, but not one was really successful. It takes 10 years to polish a sword. We spent 10 years on this platform business, it eventually entered a high-growth stage, it was in March and April. It was almost on par with Viking Rise and Doomsday. Our APP platform created fast growth. Revenue grew fast. In January, it was more than HKD 10 million. In May, it exceeded HKD 40 million. In July, it reached HKD 63 million. I would like to stress that our APP business high growth is very healthy. While it grew fast, it started to contribute to our net profit. For Viking Rise, at present, it is in an adjustment stage. Monthly gross billing is stable at around HKD 60 million. It started to contribute some profits. The biggest highlight for this game is its ultra-high retention. Number of registered users is only half of Doomsday. Number of MAU exceeded Doomsday by around 500,000. We can see that later in the PPT. For Viking Rise, we have a lot of confidence. R&D continues to be iterated and enhanced. We started a lot of subsequent new gameplay. We brought in a lot of successful innovative content from Doomsday. We plan to update it again in November, and we will do a new round of promotion to push the gross billing of the game to a new high. There is the old game, Lords Mobile. I won't say too much. In July, $34 million gross billing. It is still very strong. As what I said during March in the results announcement, this year for IGG, there are a lot of opportunities that we will seize, and we will see a rapid change from quantity to quality change. Let's move on to the PPT. Let's look at page seven. Page seven, gross billing performance. Here, there are two highlights. First of all, you can see this yellow curve representing our monthly gross billing. February of 2023 is a turning point from a trough of no more than HKD 400 million to HKD 500 million in July. Here you can see our growth performance this year. Secondly, Doomsday. We completed the first $10 million monthly gross billing milestone. In July, gross billing was HKD 82 million. In August, it continues to grow. Let's turn to page eight. Page eight. Let's take a look at the operational data of core games. First, Doomsday and Viking Rise, number of registered users. Many investors are interested in that. For Doomsday, number of registered users as of 30th of June was 22 million. Viking Rise this year, in the same period promotion started, incremental number of registered users, 11 million, only half that of Doomsday. What is amazing is the number of MAU reached 3.5 million, more than Doomsday by 500,000. For MAU, for Doomsday, only 3 million. This is because of the retention. Retention of Viking Rise is extremely good. If you know the game, well, as long as there are gamers, later on, there will be richer gameplay and content, then the revenue will definitely go up and will be bigger than Doomsday. Page nine, APP business. Here you can see very nice growth trend, starting from 10 million at the beginning of the year to 63 million in July. It did not only grow fast, it created profit for the group. This is very valuable. What is more important is the strategic meaning for APP business. It helps IGG to complete platform development, so it is a change from quantity to quality change. MAU reached 20 million for APP business. It exceeded the total number of MAU for our games. When its base continues to grow, our gamers and APP users overlapping will be higher and higher. In the future, it will not only be an important source of gamers for our games, it will also be a bridge for communication with old gamers. Through our gaming data, well, we can get the data, and we can offer richer user profile for our APP users so that the advertising positioning will be more precise. This is the strategic meaning of the APP platform. Right. Page 10. Page 10. Let's take a look at our analysis of our interim results. First, revenue. In the first half, 2.499 billion HKD revenue, up 19% half-on-half. For Lords Mobile, it is still showing strong vitality. For Doomsday, Viking Rise, and our APP business, they at the same time entered high growth stage. That means we have three carriages forging ahead together. This is a new chapter for us. Let's take a look at administrative and R&D expenses. These two were down 19% and 32% respectively year-over-year. This is because we continue to optimize and control costs and also improve efficiency with our AIGC work. In the first half, our net loss was 360 million HKD. This is because of our early investment into the market for our three blockbuster projects. For IGG, every month there is incremental gross billing of 200 million HKD. In the first half, our operation is considered very successful. Let's turn to page 11, cash position. As of 30th June 2023, our cash and cash equivalents amounted to 1.48 billion HKD. You can see that we have reserved enough cash to face up to challenges in the global market. Page 12, our total assets of the group. At present, we have total assets of 3.5 billion HKD and current assets of 2.04 billion HKD. Non-liquid assets, 1.52 billion HKD. Let's turn to page 15. It is already very clear for Doomsday, we already exceeded $10 million USD gross billing milestone. We hope that in September, after the updating in gameplay, we'll move on to the next target, $20 million USD gross billing per month. For Viking Rise, we will do a lot of subsequent GVG gameplay, and then we will also do innovation and get successful content from Doomsday and incorporate it into Viking Rise. We expect that within the year, we can push up the gross billing to a new high. For APP business, we hope that it will continue to be profitable and show stable growth, and it can challenge the $10 million milestone. Let me do a conclusion. First, for IGG's gross billing, it goes back to a historical high level in June. We continued to be profitable in a sustainable way. High growth for our new games. Doomsday monthly gross billing exceeded $10 million. Number three, please do not underestimate our third growth driver, APP business. It drove the platform development of IGG, and it will create rapid growth. Thank you. Thank you, Mr. Xu. Now is Q&A session. Before you ask question, please tell us your name and your organization's name. Let me now pass over to the operator to explain the instructions for Q&A. Thank you. Greetings. If you want to ask question, please press star one on the keypad. Please press the star key followed by the number one key. Thank you. Huaxing Capital, Zhang Yiwen, please. Thank you, Kevin. Greetings. Yes, greetings. I have two questions. I will ask them one by one. First, for your new games, I'm happy to see that the gross billing of your two games are now at $10 million or above $10 million. For the second half, what will be the operating rhythm and what will be your plan about promotion resources? Concerning gross billing, what is your expectation? Besides, I can see that for this game, MAU is around 3 million, and it corresponds to HKD 10 million gross billing. For LM, MAU is 10 million, corresponding to HKD 30 million-HKD 40 million gross billing. For these two new games in the long run, comparing with LM, how does its potential compare? That's my first question. In the second half, in terms of our investment plan, that's your question, right? Yes. Just now you talked about your operating rhythm. I would like to know how much will be the change in your investment and what will be your expectation about gross billing. In the past three months, we are adjusting our games ARPU. We hope that the ROI will be better. You can see that for Doomsday, we are making adjustment mainly to Doomsday. You can see that when DAU did not change, its overall gross billing went up 20%. After that is done, next week we will do an updating. We will connect all gamers, servers, gamers can enter an all-through open world. In September, we will introduce a PUBG gameplay. After these two updating, we will actually increase investment into Doomsday. We hope that we can push it up to a new high. Of course, for the actual investment, we will go according to the ROI rate of the game to make adjustments. If you want to know how much we will invest, it's difficult for me to give a definite number right now. For our expectation, the target is very clear. For Doomsday, we are moving towards the next milestone, that is HKD 20 million milestone. For VR, it has still not reached $10 million gross billing per month. We are gradually doing the work. We hope that it can accomplish the $10 million monthly gross billing milestone. We will increase the advertising investment. Okay. For these two games, about its long-term potential comparing with LM, do you think they are comparable or higher, or what will be the level? Well, I think we should make one step after next. For LM, around $34 million-$35 million gross billing, it is still very strong. For Doomsday: Last Survivors, at present, its retention exceeded Lords Mobile. Its ARPU exceeded that of Lords Mobile as well. I think that its potential should be more than the potential of Lords Mobile. For Viking Rise, well, among these three games, its retention is the highest. I personally think that for Viking Rise, its subsequent gameplay will be richer after that. Its ARPU will go up, it will surpass Lords Mobile. There will be that possibility. Thank you. My next question is back to the PPT. There is a new game, one MMO, one SLG. Can you elaborate on the timetable besides? In your portfolio, there is LM and there are two rising new games. What do you think will be the allocation of R&D resources in the future? Thank you. Okay. For our new games, at present, we are doing R&D for new games of 10 odd games. There are SLG, MMORPG categories. There are also other games. For these games, well, we started the project these two years. We started to do the work. The design standards are higher than before. For the games, no matter how good the design is, the actual performance will have to be known only after it's online with more data, then we will know its future potential. Don't be too anxious. Recently, we placed all our attention to our three new projects. For subsequent games after they are online, we will communicate with you at the first instance. Thank you. Thank you, Kevin. Next one from CICC, Yu Xin Yao, please. Okay. Thank you, management. I have two questions. First, just now you talked about Doomsday: Last Survivors and your plan. I want to know for Viking Rise, concerning updating plan of its subsequent version, what will it be like, and what about the KVK gameplay? For Viking Rise, well, during this time, all along, we let it follow Doomsday: Last Survivors' approach. At the end of July, well, there are two lines really, one KVK and the other is GVG, guild versus guild gameplay. This is in line with Doomsday: Last Survivors. For KVK gameplay, it is very similar with Lords Mobile. For GVG, it is more like Doomsday: Last Survivors. At the end of July, in the game, we began to start some KVK gameplay. We have not covered all gamers yet. For the game, it is still being adjusted. We will do more promotion. For gross billing, it is rather stable. We expect that within November, we will complete the GVG gameplay. At the same time, from now till November, for Doomsday: Last Survivors, in the past three months, we made some success. There's huge amounts of innovative content. It will be integrated into Viking Rise. I believe that at that time, our Viking Rise game ARPU and gross billing will see huge potential for gro wth. Okay. Understood. My second question is about updating. What kind of application programs will that be? Some time ago, you talked a lot about the strategic outlook, but we are not quite clear of what apps will be available. This year and next year, when it comes to your overall bottom line guidance, can you elaborate? Okay. At present, concerning APP business, it is a project with high growth. Of course, because of commercial secret consideration, we're not in a position to disclose externally the name of the APP and the share of revenue. In the future, we will continue to try different directions, and when the time is ripe, at that time, we can communicate with you further. Right now, we're still in a high growth rate stage. We don't want other competitors to copy from us. At this stage, we will not make any external disclosure. Thank you. Right. Understood. We will continue to observe. One more small question. For this year and next year, in terms of bottom line, what will be your guidance? Okay. For bottom line. Our profit margin next year, if you look at the current moment, profit margin is around 10% and above. When our gross billing continues to increase in 2024, we believe that our overall bottom line and profit margin will be at around 15%. Including our APP business, the overall profit margin will reach that level. Then for next year, that's our expectation, and we're looking forward to that. Okay. Thank you, management. I have no further question. Thank you. Greetings. If you want to ask question, please press star one on the keypad. First, please press the star key and then followed by the number one key. Thank you. Huatai Securities, Wu Xiaoyu, please. Greetings. Can you hear me? Yes, greetings. Thank you, management, for your sharing and this opportunity to ask question. I have two questions. First, just now, you talked a lot about new games, and just now Kevin talked about Lords Mobile. This year, you recovered a healthy, stable gross billing level. This year, in the second half and in the future for Lords Mobile products, gross billing and users and also investment, what is your outlook? Second question. In the first half, you mentioned the APP tool and business. Administrative and R&D expenses decreased quite a lot. At present, in the future, when it comes to R&D expenses, including your team change, what is your plan? Thank you. Okay. Regarding Lords Mobile and its future, you can see that in the first half of this year, for our another game, Doomsday, we're not very anxious with its promotion. In April, we did a round of promotion after that. In the market, if you look at this game or SLG game, next generation direction is where? We have some feelings about that. Starting from April, we had not done large-scale promotion, then we did not do a lot of big attempts. The result is that starting from April all the way to July, we did not invest a lot in advertising, and DAU did not rise crazily. It did not really change, but ARPU still went up 20%. In other words, we have found a way, a core approach to optimize the game. For our successful experience and ideas, as I said just now, we will pass them on to Viking Rise. We will incorporate them, for sales activities and design and so on, they will be passed on to Lords Mobile as well. In the coming three to five months for Lords Mobile, there will be incorporation of the new sales activities and design concepts and ideas, and new generation design concepts into Lords Mobile as well. In the second half, Lords Mobile's gameplay is being updated, and we will continue to do global promotion. You can see rather stable performance in monthly gross billing for Lords Mobile. But if there is the opportunity, we will also try to develop more. For Lords Mobile gross billing, I already said that it is $34 million USD. I do not need to say too much. It is still very strong. It is the seventh year already. In the future, we believe that we can maintain this level. We won't be lower. Of course, we hope to see some increase as well. For R&D team, starting from last year, we optimized our resources significantly. Number of employees decreased from 3,100 odd to 2,160, no more than 2,200. In other words, we have optimized for around 1,000 people. That means R&D people account for 60% of the total. We'll continue to do optimization, and we will do dynamic adjustment to our game performance. For administrative and R&D expenses, comparing with same period of last year, they will be reduced by 10%-20%. Right now, on many occasions, I said already that next year our target is that we have to create profit for our company and for shareholders. That means that we will try our best to expand revenue and profit for our games. At the same time, we will also streamline our staff establishment so as to create more profit potential for our investment. Thank you. Understood. Very clear. Thank you very much. I look forward to better business development and your products. Thank you. Thank you for your regards. Greetings. If you want to ask question, please press star one on the keypad. Please first press the star key, followed by the number one key. Thank you. Let's invite Yang Linlin from Guangfa Securities. Kevin, greetings. Thank you for this opportunity. Yes, greetings. I have a few questions. For APP monetization method, can you share with us? Okay. APP monetization, it is simple. It is pure advertising. In other words, we will exchange traffic for advertising. For APP, as such as now, there are two levels of meaning. First of all, it can monetize and create revenue and profit for us, at the same time, what is most important is that with the user base of APP, its growth is very fast. APP users and our gamers, the overlapping is higher and higher. When the base continues to rise, the overlapping will continue to rise. In the future, it becomes an important source of gamers for us. At the same time, it will be a bridge for communication between us and old gamers. Every day, let's say there is revenue of HKD 10 odd million, and then there is profit from that. More importantly, we attach importance to our communication, the bridge. It is serving as a bridge between us and the gamers. We are also a game company, the game data can help us get richer user profile. For our APP, its advertising position and status will be more precise than others. This is the strategic meaning of our APP platform. Thank you. Understood. Very clear. My second question is, our two games and also the APP, is there any retention data that you can tell us? Are you referring to the retention of games or APP? Including those two new games retention and the retention of APP as well. At present, APP retention is very high. APP retention is a lot higher than our games retention. It should be around 60% or above. That's the retention of our APP. For Doomsday's retention, it should be around 25%. For Viking Rise, I said already that its retention is very high, around 37%. That is its retention. Very clear. My third question is about expenses. For your overall revenue, it grew fast. At the same time, in the first half, selling expenses also grew fast. Can you let us know the main direction of your selling expenses? Among the products, how is the breakdown in the future? What is your plan? Right. At present, in the first half, we did a lot of promotion for Doomsday and Viking Rise. For games promotion, it is more expensive, right? For Doomsday, the promotion expenses almost accounted for 30%, Viking Rise, 20%, Lords Mobile, 30%, the remaining 10% was for APP. In the second half, we will increase promotion for the two new games. We expect that we will have the same structure as in the first half. For the actual budget, we will make adjustment based on the actual performance of the games. In the second half, the biggest advantage is that we have some data. In our database, there's enough data to support us. For example, Doomsday, Viking Rise, what price should we set? What kind of return on investment can they give? How many users and so on. In the second half of the year, I think the capital utilization will be much better than in the first half. For APP, will continue its growth. For APP promotion expenses, you can see that its revenue went up from $1 million to $8 odd million. Its promotion expenses was very small. We will continue to drive it upward. Next year, we will launch some new games. For promotion expenses, after they're online, we will see its testing condition and its ROI performance to make adjustment. As in the past games, at the beginning of launch, we will be very aggressive and see whether we can be successful. We have 3 very good projects already. In the future and next year, we believe we will be more stable and sound. Thank you. Very clear. Thank you, Kevin. These are all my questions. Thank you. Greetings. If you have questions, please press star one on the keypad. Please first press the star key followed by the 1 key. Thank you. Greetings, if you want to ask questions, please press star one on the keypad. Please press the star key first, followed by the number 1 key. Thank you. Well, we have received the last question on the line. Dahua Investment, Wang Huijing, please. Management, greetings. Can you hear me? Yes, greetings. I have a question. Can you please speak louder? I can't really hear you clearly. I have two questions. First, for your operating cash flow, well, it is much less than your reported loss. When it comes to your receivables, is it true that you have to work on your payable, or is it related to your prepay? There is a payable of HKD 800 million. Why is that? About dividend, there are two years where no dividend was paid. You said that, starting from June, you are profitable. It seems that your path is very positive. You have a lot of cash. In the future, this year, well, is there anything you can share with investors in terms of dividend payout? Thank you. Thank you for your question about dividend. For IGG, we have been listed for 10 years basically, for nine years, we have paid dividend. This has become our tradition. When our profit turns positive, we will resume our high dividend tradition. Thank you for your interest. You also asked a question about loss. I'm talking about the operating cash flow. No. You mean the reported loss and the difference? No. Your operating cash flow performance is much smaller than the notified loss. Well, only a few, HKD 10 million for your operating cash flow, your AP, your payables increased a lot. Your payable increased a lot. Why is that? Is it because of prepayment to those game developers, or is it true that you have to pay for promotion, game promotion, and so on? Do you understand what I mean? Yes, yes. Okay. I'm Jessie, CFO of the company. Let me answer. On the accounts, yes, there is increase to our payable because in Q2, we did a lot of promotion and advertising expenses accounting lags behind. For example, in Q2, a lot of expenses were incurred in the end of July and August, that's why there is a payable as shown. Thank you. Sorry, can I follow up? Yes, please go ahead. I'm not familiar with your gaming business. Regarding selling expenses of HKD 1.5 billion, what is its breakdown? For Apple, there's only 30% discount. What is that HKD 1.5 billion expenses? Is it selling expenses? What is it? Marketing expenses and promotion, that includes digital marketing online. Some are on-ground events and activities. When it comes to game promotion and sales promotion, there are a lot of details. Perhaps I can communicate with you after this conference call. Okay. Thank you. Thank you. Next, FangZheng Securities, Ma Ziyan, please. Yes, yes. Thank you, management, for taking my question. I have two questions to ask. First, was mentioned just now regarding your staff Establishment, it is being reduced. Concerning decrease in number of employees, in which area mainly, what are your considerations? Other investors may be worried that when you reduce your manpower, will that affect R&D and launch of future new projects? That's my first question. Thank you. That's my only question. Thank you. Okay. Regarding the reduction in our manpower, well, the cut is quite a big one because there is some replacement. As you know, from the beginning of this year, there was ChatGPT, AI actually did a big help to this industry. There are three directions here. We are using AI to a large extent. For our global customer service, in the past, in the whole world, we have 20 odd offices where there are customer service people offering service in 20 different languages. Right now, for overseas language customer service people, they are replaced by AI already. When we work on games, there is a large amount of translation and localization and cross-checking work. That team is also replaced by AI. Besides, for R&D, a lot of artwork, where as you know, AI can do artwork very fast. As long as you have enough materials to train it, then AI actually can bring to the gaming industry artwork a revolutionary transformation. Even though there is big decrease in the number of employees from 3,000 odd to 2,000 odd, however, our gaming projects being researched have not decreased in number. Two weeks ago, in early August, we are doing external tests on 10 odd games, in the future, in the coming three to four months, there are five to six games that will be tested. In other words, even though the number of employees decreases fast, however, our R&D work efficiency has not come down. We're still working on the projects that we ought to, and our effectiveness is even better. Yes, understood. My next question is about R&D expenses or selling expenses rather. Just now, I heard that in the first half, some selling expenses will be recognized in the financial statement in the second half. In the second half, when it comes to expenses, what is the outlook at present for the two new games? How is the profitability? Can you share with us the outlook, please? Thank you. Right. I'm Jessie. Sorry, Kevin. Let me supplement first. Just now, we said that there's an increase in payable as of the 30th of June, and then I think it is already in the first half profit and loss, so it's payable on the liability side. There is a decrease in July and August that may affect the second half. The second half profitability will not be affected. In the second half for promotion, perhaps we will refer to the guidance made by our COO, so there will be some investment. When it comes to administrative and R&D expenses in the second half, comparing with the first half, we'll continue to streamline and optimize, so there will be a 10% decrease in terms of the number of employees. Okay, thank you. Understood. Now, I have one last question to follow up. I joined quite late, so I'm not sure whether someone else has asked my question. I want to ask about R&D expenses, and future amortization rhythm for the two new games. R&D expenses. Well, we do not have this amortization concept. R&D expenses means the expenses on those R&D people. The salaries will be recognized in the accounts every month. There isn't the so-called amortization. Okay. Thank you very much. Thank you for taking my questions. I have no further questions. Okay. Thank you. Because of time, the results conference call will be concluded here. Thank you very much for your interest in the company. On behalf of IGG, I would like to thank you once again for your participation. Okay. Thank you, investors. Thank you, everyone. Thank you for joining this meeting today. I wish you a pleasant day. Thank you.